Scenario 6-2
Suppose Demand for a Product Is Given by the Equation

Essay

Scenario 6-2
Suppose demand for a product is given by the equation
Q^D = 120 - 4P
and supply for the product is given by the equation
Q^S = 4P
-Refer to Scenario 6-2. Suppose the government sets a price floor at $13 for this product. Initially, is this price floor binding? Suppose that for some reason demand were to decrease to
$$Q ^ { D } = 80 - 4 P$$ Would the $13 price floor be binding after the shift in the demand curve? If so, what is the size of the resulting shortage/surplus?